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Media exposure fueled auto show's growth, economic impact

Photo by Bloomberg
Rod Alberts, executive director of the Detroit Auto Dealers Association and the NAIAS

Correction appended

Thank a reporter for the sizable economic impact of the North American International Auto Show.

Since rebranding and opening the show in 1989 to foreign media, and thus foreign automakers, NAIAS and Detroit businesses have seen a boon, said Rod Alberts, executive director of the Detroit Auto Dealers Association and the NAIAS.

"Going international meant we had to make sure we had the media," Alberts said. "That upped the ante for companies that didn't sell that much product in the Detroit region; it really took away the concept of market penetration and made it more about media coverage."

Media coverage has grown from 200 regional reporters in the 1980s to an expectation of more than 5,500 from 65 countries in 2014. The increase in coverage has led to increased investment in the show from automakers, suppliers and vendors, Alberts said.

The 2014 NAIAS is expected to create an economic impact of $380 million to $395 million, said David Sowerby, portfolio manager for the Bloomfield Hills office of Loomis, Sayles & Co. and NAIAS economic analyst.

Since going international in 1989, the show has generated an estimated $9.7 billion to $10.1 billion in economic impact to the area, Sowerby said.

Sowerby calculates the impact figure in an equation that takes into account the health of the economy, expected travel budgets for families and companies, and industry indicators, such as new model launches, sales and capital spending.

Toyota and Nissan headlined the first NAIAS by launching their Lexus and Infiniti luxury brands. With the economy rolling throughout the 1990s, strong car sales propelled Detroit's auto show to new heights ... literally.

"The strong economy was the primer for upward growth in the 1990s," Alberts said. "The stars aligned a bit, and that's when they (automakers) started coming in with big (in some cases, double-decker) displays."

Scott Stubbs, president and CEO of Troy-based exhibit maker H.B. Stubbs Cos., entered the family business the year the show went international in 1989. He was the third-generation Stubbs in the family business.

Stubbs said the vehicle displays and exhibits of old were basic in architecture and design. With the attraction of global media and a growing show, the exhibits rose — in price and size.

"They (displays) are going higher and taking longer," Stubbs said. "Real money is being spent during press week, and everything is becoming much more sophisticated."

Alberts said as much as $200 million is being spent on displays at the 2014 NAIAS.

Stubbs said modern displays feature flowing curves to mimic the cars — and many are being built upward to take advantage of Cobo's high ceilings.

But the main attraction that generates big spending is the "experience," he said.

"Now tech is more focused on the consumer to help their engagement: What they take away from the show and helping people understand the product, as well as to experience the product," Stubbs said. "Learning is critically important because auto shows are a sales environment ... it's one of the measurable influencers of preference and what drives customers to the showrooms."

As many as 75 Stubbs employees are working on exhibits, including supplier ZF North America's booth, ahead of the 2014 show.

The build-out of the show's exhibits is where the economic impact begins, and ends, Alberts said.

Build-out begins around Halloween each year, with hundreds of workers loading in the massive displays and materials. It ends the minute the show closes its doors after the public days.

"The economic impact is a staggering benefit that happens over a two-month period," Alberts said. "Nobody in 1988 said, 'Let's build an international show so we have $390 million in economic impact,' but the byproduct of this show is a great opportunity that most cities aren't lucky enough to have."